Trial set in breach-of-contract suit

July 30, 2013

QCS Staff

Trial has been set for Jan. 8 in a breach-of-contract lawsuit that the City of Tucumcari filed against the RAD Water Users Cooperative after the cooperative refused to pay higher wholesale water rates that the city imposed last year, even though, the city says, the increase is justified. The trial will be held in Quay County under Judge Gerald Baca.

The cooperative refused to pay 2012 rates that were 28 percent higher than 2011’s after the city had raised rates 10 percent from 2010 rates to 2011 rates court documents show. In 2012, Tucumcari s wholesale rate rose from $2.19 per 1,000 gallons to $2.81 per 1,000 gallons. The 2011 rate was nearly 10 percent higher than the $2.00 per 1,000 gallon rate the city charged in 2011.

In a response filed in June to the city’s suit, filed in March, the cooperative said that since the City of Tucumcari can’t account for about half of the water it pumps through its water system, as well as other failures in maintaining its water system, it cannot justify charging rates that are 28 percent higher than a year ago.

RAD says the city has not proven its case for the water rate increase, using criteria established through a 1987 court decision and an agreement RAD and the city signed in 2010, court documents show. The city’s attorney, Randy Knudson, would not discuss the case in detail but said he is confident the court will find the city has made its case for the rate increase, according to terms of a 1987 case and the 2010 agreement, and RAD will be found to be in arrears in paying for the water it has consumed.

The water loss information comes from a report of a study of Tucumcari’s water financing and billing conducted in 2011 by the Rural Community Assistance Corporation funded by U.S. Department of Agriculture Rural Development. The report , which is included in the court case documents. Shows that Tucumcari pumped nearly 435.7 million gallons of water in 2009 and sold 231 million gallons, leaving 204.6 million gallons unaccounted for. The 204.6 million gallons that seems to be unaccounted for represents about 47 percent of the water pumped.

The result is that all Tucumcari water customers, RAD Attorney Michael Garrett said, are paying for twice as much water than they need. Tucumcari City Manager Doug Powers said metering is probably more to blame for the recorded difference between water pumped and water used than leakage or unaccounted-for water usage.